Southampton have been left stunned as Chinese shirt sponsor LD Sports are set to quit the club before the new season – a shock decision that could cost the club £15million.
Club officials have discovered that the sponsor is likely to walk away from their agreement two years early.
The three-year deal, worth a club record £7.5million a year, started last season and was set to run until 2022.
A source close to the deal told the Mail on Sunday: ‘Southampton officials are already looking for a new main club sponsor, anticipating the LD Sports decision.’
Sources close to Southampton have admitted there was a break clause in the agreement this summer and that they are working to ensure they are not to be left without a sponsor going into the new season.
It is understood the LD Sports decision has been influenced by the political situation between China and the UK, plus investment concerns due to ongoing uncertainties due to COVID-19.
Blackburn Rovers have also confirmed their partnership with main sponsor – Chinese gambling company 10 BET – has ended.
The Mail on Sunday understands at least one other Premier League with a Chinese sponsor, is facing the same nightmare situation ahead of the new season.
The situation has been made worse for clubs as the football calendar has been condensed this summer due to coronavirus.
Southampton released their new kit last month, with thousands of fans having already snapped up the latest designs, which could be out of date within weeks.
It is understood the club is already planning how to work with fans that have splashed out, once the LD Sports decision is made official.
There are no concerns within Southampton that the LD Sports decision in any way reflects the intentions of owner Jisheng Gao.
But red flags had been raised over the sponsorship deal last summer when Southampton signed an agreement described as ‘the most lucrative partnership in the club’s history’, before LD Sports had even started trading.
LD Sports, described as a sports content, marketing and entertainment platform in China, replaced a previous £6million a year agreement with Virgin Media.
The deal was seen as part of the club’s attempt to broaden their appeal in China.
Saints Commercial Director David Thomas said in an official statement last year: ‘We are looking forward to using our growing credentials and awareness in China, as well as our content and digital marketing expertise, to help the brand achieve its business objectives over the next three years.’
The shock decision by LD Sports will send alarm bells ringing through other clubs currently in agreements with Chinese sponsors.
It also comes as the Premier League are locked in a legal dispute with their Chinese broadcast partners that could cost clubs hundreds of millions of pounds in lost television income.
Rights holders Suning Holdings have withheld a payment of £160million that was due in March, with the Premier League retaliating by rejecting their offer for a three-year extension to the contract to cover the 2022-25 seasons.
The stand-off has potentially seismic ramifications for club finances as the Chinese TV deal is the most lucrative in the world outside the UK, with Suning agreeing to pay £564m for the current 2019-22 cycle for the right to broadcast Premier League games on their digital channel, PPTV.
Last month China’s state television broadcaster relegated the Premier from its main sports channel to one that lures fewer viewers – seen as a sign football was being ensnared in the increasingly fraught relations between Beijing and the UK.